4 Common Misconceptions About Leadership Accomplishments
The concept of entrepreneurship is multi-faceted. You will discover varied, company management diverse and somewhat contradictory sets of definitions of the term. As a way out the definitional dilemma, this article aims to describe the financial perspective on entrepreneurship.
The economic perspective rests on certain financial variables which include innovation, risk bearing, and resource mobilization.
Innovation/Creativity Within this approach, entrepreneurs are people whom carry out new combination of productive resources. The key ingredient, the carrying out of new combination (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation appears as the most prevalent form of entrepreneurship, there exist other forms. Entrepreneurship also involves the initiation of changes within the type of subsequent expansion within the quantity of goods produced, as well as in existing form or structure of organisational relationships.
In the entrepreneurship literature, some scholars have questioned the use of organization creation as criterion for entrepreneurship. It has been argued that organizations for example political parties, associations and social groups tend to be created by men and women that are not "entrepreneurs." Interesting as it might sound, the terms entrepreneurship and entrepreneur are already adopted by varied scholars to meet the innovation and spirit of the time. This is evidenced by attempts to apply entrepreneurial thinking to contemporary team-oriented place of work strategies. Members of such groups - political parties, associations and social groups - therefore, may very well be called entrepreneurial teams. Besides, activities inherent in such groups have flourished at this point, and also are increasingly being described as social entrepreneurship.
Risk Taking This is another financial variable upon which the economic perspective revolves. Risk taking distinguishes entrepreneurs from non-entrepreneurs. On a regular basis, entrepreneurs are calculated risk takers. They bear the uncertainty in market dynamics. This notion has its critics and advocates. Entrepreneurs might not necessarily risk her own funds but risk other personal capital such as reputation and the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities in the economy. This implies the allocation of resources in pursuit of opportunities with the entrepreneur playing the role of a chance identifier. This way, entrepreneurs are distinguished by their capability to identify persistent shocks or challenges (of long-term opportunities) to the environment, and then to synthesize the information and take decisive actions based upon it.
This article has conceptualized entrepreneurship determined by resource mobilization, risk taking, and innovation. Beyond the previously mentioned financial variables, entrepreneurship could also be viewed according to a set of personal characteristics, motives and incentives of the actor within the entrepreneurship act. This is the psychological perspective, the subject of a future article. As well as the psychological perspective, we shall also examine the process and small business perspectives.